Interim CFO IR35 Agreement Template UK
Engaging an interim CFO through a personal service company creates immediate IR35 exposure for both the contractor and the hiring organisation. Without a properly drafted contract, HMRC can deem the arrangement a disguised employment relationship under Chapter 10 of the Income Tax (Earnings and Pensions) Act 2003, triggering significant tax liabilities, National Insurance arrears, and penalties. Since the off-payroll working reforms of April 2021, medium and large private sector clients bear responsibility for determining IR35 status, making watertight contractual wording more critical than ever. A compliant Interim CFO IR35 Agreement must clearly evidence substitution rights, financial risk, and control to reflect genuine self-employment. It should also address payment terms under the Late Payment of Commercial Debts Act 1998. Generate a tailored, legally robust interim CFO IR35 agreement now.
Generate your IR35 Agreement free →Key clauses in a IR35 Agreement
Right of Substitution
This clause grants the interim CFO's personal service company the genuine, unfettered right to send a qualified substitute to perform the services, a factor HMRC and tribunals treat as a strong indicator of self-employment under IR35 case law including Autoclenz Ltd v Belcher [2011]. The substitution right must be real and contractually enforceable, not merely theoretical, or HMRC may disregard it entirely when assessing status under Chapter 10 ITEPA 2003.
Control and Autonomy
This clause defines the scope of services and confirms that the client controls what financial outcomes are delivered, not how, when, or where the interim CFO works day-to-day, directly addressing the 'control' limb of the Ready Mixed Concrete employment status test. Weak or absent control provisions are one of the most common reasons HMRC concludes an engagement falls inside IR35, exposing the fee-payer to unpaid PAYE and Class 1 National Insurance contributions.
Financial Risk and Liability
This clause requires the PSC to rectify defective work at its own cost and without additional payment, demonstrating that the contractor bears genuine financial risk, a key indicator of self-employment recognised in HMRC's Check Employment Status for Tax guidance. It also establishes the contractor's liability cap and professional indemnity insurance obligations, ensuring both parties understand commercial exposure and reinforcing the independence of the engagement for IR35 purposes.
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Generate free →Frequently asked questions
Who is responsible for determining IR35 status for an interim CFO engagement in the private sector?
Since the off-payroll working reforms that took effect on 6 April 2021, medium and large private sector clients are responsible for determining the IR35 status of contractors under Chapter 10 ITEPA 2003. The client must issue a Status Determination Statement (SDS) to the contractor and any agency in the supply chain. Small companies, as defined by the Companies Act 2006, are exempt and the responsibility remains with the contractor's PSC.
Can an interim CFO contract help demonstrate outside IR35 status even if the day-to-day role looks senior and embedded?
Yes, but the contract must reflect the genuine working reality, as HMRC and employment tribunals will look beyond contractual wording to actual working practices following the Supreme Court's judgment in Autoclenz Ltd v Belcher. Clauses evidencing substitution, lack of supervision, and financial risk can support an outside IR35 determination, provided those terms are genuinely observed in practice. A contract that contradicts real working arrangements offers little protection and may be disregarded entirely.
What payment terms should an interim CFO IR35 agreement include to protect the contractor's PSC?
The agreement should specify clear invoice intervals, typically monthly or milestone-based, and set payment terms of no more than 30 days to align with the Late Payment of Commercial Debts Act 1998. That Act entitles the PSC to claim statutory interest at 8% above the Bank of England base rate on overdue invoices, plus fixed debt recovery costs of between £40 and £100 depending on the debt value. Including these rights explicitly in the contract reinforces the commercial nature of the relationship, which also supports an outside IR35 position.
The information on this page is for general informational purposes only and does not constitute legal advice. Contracto generates AI-assisted contract templates — they are not a substitute for advice from a qualified solicitor. For high-value or complex engagements, always seek independent legal review.